On June 29 President Barack Obama signed the Trade Promotion Authority (TPA) bill giving him "fast-track" powers to conduct and conclude trade legislation. The TPA was reinstated after it passed through the Senate with a 60-38 vote in favour on June 23 following approval by the House of Representatives the previous week. The TPA covers the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership and any other trade agreement negotiated during a period of up to six years. Essentially, the law gives Congress the right to accept or reject final trade agreements, but not to make any changes to them.
These recent developments pave the way towards the conclusion of the TPP, a 12-nation trade deal, which includes Australia. While TPP negotiations continue and challenges to concluding the agreement still remain, the signing of the TPA should provide a much needed boost to negotiations.
Liberalisation of trade should preferably advance on a multilateral basis; however, in the absence of any foreseeable completion of the World Trade Organisation Doha round of negotiations, advances in the liberalisation of international trade must occur, by default, pursuant to regional, bilateral and other free trade or similar agreements. The TPP, which is a regional agreement, can offer meaningful benefits to all parties with an increased chance of reaching a consensus.
TPP is currently being negotiated by Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Japan, Singapore, Peru, the United States and Vietnam.
The potential gains for Australia are significant, with Australian exports to partner countries worth nearly $100 billion in 2012. Moreover, given more than 70 per cent of Australia's trade is with Asia Pacific, the TPP is going to support trade liberalisation throughout the Asia-Pacific region, creating a better trade environment for Australian companies and ultimately increase economic integration of Australia into the region.
The TPP will provide preferential access to three new markets Australia does not have free trade agreements with, namely Canada, Mexico and Peru. It also provides an opportunity to improve current levels of benefits occasioned under our existing FTAs with countries who are also party to the TPP. There has been some criticism our current FTAs have not gone far enough and the TPP agreement provides a welcome opportunity for Australia to negotiate improved outcomes.
In accordance with the treaty making processes, there will be an opportunity for full public and parliamentary discussion prior to the Australian government entering into any final agreement.